USD expected to resume the upside – Danske Bank

FXStreet (Edinburgh) - In the opinion of Allan von Mehren, Chief Analyst at Danske Bank, the current weakness around the greenback should be temporary.

Key Quotes

“The USD sold off again on Friday with EUR/USD temporarily touching 1.09 following the weaker-than-expected US durable goods order data”.

“For some time there has been a very large gap between the euro economic surprise index and the US economic surprise index, reflecting that euro-area data consistently have been beating expectations in early 2015, whereas the opposite has been the case in the US”.

“We expect the tendency for negative US data surprises to reverse in the coming months – in particular driven by an improvement in private consumption data”.

“At the same time, we expect the series of positive euro-zone data surprises to end for now, as expectations have been raised for economic data making it harder to beat them”.

“Moreover, we note that euro-area surveys have now reached quite high levels, making it harder to deliver further increases”.